North Carolina’s four Medicaid plans now share fraud leads, with ABA a top concern, as closed networks, 90-day reviews, and unannounced site visits take hold.
Key Takeaways
- Spending growth drew the scrutiny. NCDHHS puts spending on research-based behavioral health treatment, which includes ABA, at $544.4 million in SFY 2025, up from $121.7 million in SFY 2022, and projects $1.14 billion by SFY 2027.
- The health plans now compare notes. A 10-person task force launched in August lets investigators at all four Standard Plans check a provider flagged by one plan against their own claims.
- Growth is not a fraud finding. NCDHHS listed policy gaps and market entry among possible drivers, and the task force, which meets privately, has disclosed no case results.
- ABA agencies now face several reviews at once. Closed networks, 90-day reauthorization above 16 weekly hours, a November 29 technician deadline, and unannounced site visits for high-risk agencies now overlap.
Investigators at North Carolina’s four Medicaid managed care companies spend most of their working lives as competitors. Since August, they have also been meeting once a month behind closed doors. The North Carolina Association of Health Plans launched what it describes as the state’s first joint task force on Medicaid fraud, waste, and abuse, bringing together the special investigative units and government relations staff of AmeriHealth Caritas, Healthy Blue, UnitedHealthcare, and Carolina Complete Health. Applied behavior analysis, the association says, is one of its biggest areas of concern.
The task force is not a regulator, and it keeps no public docket. Peter Daniel, the association’s Executive Director, told North Carolina Health News that much of its work will stay confidential by necessity. “A lot of this will not be public,” he said. What it adds is a channel: a way for a billing pattern flagged at one plan to be checked against the other three.
It also arrives in a year that has rebuilt North Carolina’s ABA benefit from the statute down: a new oversight law, a closed-network mandate, a rewritten clinical coverage policy, a technician certification deadline, and, as of October 1, unannounced site visits for federally required provider screening. None of these tools is a finding of fraud. Taken together, they describe a benefit that is now examined from several directions at once.
How the North Carolina Medicaid Fraud Task Force Works
Daniel told NC Health News that the group grew out of a meeting with State Auditor Dave Boliek, at whose invitation plan representatives demonstrated the data tools they use to spot unusual billing. Because the four plans often contract with the same providers, the task force lets investigators at the other plans examine a provider’s activity in their own systems once one plan has referred it to the state.
The 10-person group includes Daniel; Taylor Griffin, the association’s Senior Policy Adviser for Medicaid; and an investigator and a government relations representative from each plan. Griffin said the plans’ quarterly reports to the state have shown hundreds of referrals over the years involving potential provider or organizational billing issues. The red flags he described included claims that do not match electronic visit verification records and repeated duplicate billing, which he noted can reflect a faulty billing system as easily as intent.
The association said the task force covers no single service and does not replace enforcement by the North Carolina Department of Health and Human Services, the State Auditor, or law enforcement. NC Health News did not list the state’s four Behavioral Health and I/DD Tailored Plans, which also manage ABA services, among the participants.
North Carolina Medicaid ABA Spending: What the Data Shows and What It Does Not
The numbers behind the concern are large, and they come in two versions. In a March 10 presentation to the Joint Legislative Oversight Committee on Medicaid, NCDHHS put total spending on research-based behavioral health treatment, the benefit category that includes ABA, at $121.7 million in State Fiscal Year 2022 and $544.4 million in SFY 2025, and projected $1.14 billion by SFY 2027. Members receiving the service rose from 3,844 to 13,447 over those three years, including 8,706 in SFY 2024. Spending rose about 65 percent between SFY 2024 and SFY 2025, while the number of members served rose about 54 percent.
An NC Health News analysis of state payment data, which isolated ABA, found state and federal Medicaid ABA spending passed $505 million in 2025, up from $1.9 million in 2020. The department told lawmakers it was “unlikely that this level of growth can be explained by increased access alone,” and that spending growth was concentrated among a small number of providers and far outpaced growth in new provider enrollment.
The department’s list of possible drivers was broader than fraud. It included ABA being used where less intensive supports might be appropriate, a clinical coverage policy that lacked specificity, billing guidance that lacked clarity, and a significant number of new providers entering the market. Attorney General Jeff Jackson told a House oversight committee earlier this year that the growth deserves to be flagged as a potential source of fraud, and said in April that his office was investigating.
None of that is a fraud finding, and the task force has not reported results. The two recent North Carolina cases NC Health News cited in its task force coverage involved a substance use treatment center and a nursing home, not ABA providers. Federal auditors draw a similar line: the OIG’s state ABA audits describe improper and potentially improper payments, largely documentation failures, rather than intentional fraud.
How HB 696 and the July Budget Rewrote North Carolina’s Medicaid ABA Rules
House Bill 696, signed by Governor Josh Stein and enacted as Session Law 2026-1 on April 30, set the first round of terms. As Acuity reported in May, it added telehealth limits, supervision floors, and enrollment restrictions, and it allowed health plans to take steps to close their networks to providers suspected of fraud in certain circumstances. It also required monthly reauthorization for treatment plans above 16 hours a week.
The 2026 Appropriations Act, signed July 7, went further on networks and eased the clock. Section 9E.22 requires every health plan to maintain a closed network for research-based behavioral health treatment, and it replaced monthly reauthorization with a two-tier schedule, as Acuity reported in September: every three months above 16 hours a week and every six months at or below. The amended Clinical Coverage Policy 8F took effect August 1. Behavior technicians without a recognized certification entered a 120-day grace period that day, which ends November 29, and since August 2, behavior analysts must enroll in NC Medicaid as in-state providers; NC Health News reported an exception for out-of-state clinicians within about 40 miles of the patient.
NC Medicaid’s current RB-BHT bulletin, an August 31 update that replaced versions posted July 21 and August 5, says monitoring will include random onsite visits and desk reviews of medical records. It lists what the state will investigate, including inappropriate concurrent billing, caseloads or supervision hours inconsistent with expected clinical practice, excessive or exclusive telehealth, services delivered by providers not located near the beneficiary, lapsed credentials, and a lack of discharges or titration across a practice.
NC Medicaid Unannounced Site Visits and Reverification Now Reach ABA Agencies
Two changes this fall were written for NC Medicaid as a whole, and both reach ABA agencies. Beginning October 1, site visits required under 42 CFR 455.432 are no longer scheduled. Public Consulting Group, which screens moderate- and high-risk providers for the state, now notifies providers that a visit will occur within a window rather than on a set date. The state’s notice says failure to grant prompt and reasonable access may result in suspension or termination, and providers that completed a Medicare site visit in the past five years can indicate that on their application.
ABA organizations sit inside that group. NC Medicaid’s Provider Permission Matrix, the enrollment reference the state publishes on NCTracks, lists research-based behavioral health treatment as a service under the Community/Behavioral Health agency taxonomy, 251S00000X. The version generated August 16 classifies in-state organizations enrolling under that taxonomy for Medicaid as high categorical risk, with a federal site visit, fingerprinting, and the federal application fee all required. At an August 18 provider webinar, NC Medicaid said high-risk status triggers site visits and fingerprints for owners with a 5 percent or greater direct or indirect share, and that the classification excludes organizations with an accepted national accreditation active on their NCTracks record. The matrix does not require accreditation to offer the service.
Individual clinicians are treated differently. The same matrix lists behavior analysts enrolling under the Behavior Analyst taxonomy, 103K00000X, as limited risk, with no site visit or fingerprinting required, and includes them only as in-state or border enrollees, consistent with the in-state enrollment rule that took effect August 2.
Separately, a July 16 bulletin said CMS had asked the state on April 23 to conduct off-cycle, expedited reverification focused on providers classified as high categorical risk that have not been reverified in the past 12 months or are due within the next 12, with notifications expected in late September. ABA agencies carrying the high-risk classification fall within that scope when they meet either timing condition.
Both are routine program integrity tools under federal rules. They are distinct from fraud investigations, although a failed site visit or a missed reverification deadline can end a provider’s participation all the same.
What ABA Providers and Families Have Said About the Pace of Change
Provider objections have generally centered on timing rather than on oversight itself. Han-Leong Goh, a doctoral-level Board Certified Behavior Analyst, told NC Health News in July that accountability is good, but that the timing and intensity of the changes matter. Selene Johnson, Executive Director of ABC of NC, questioned whether the state could process quarterly reauthorizations on schedule when six-month cycles were already running late. Avani Shah, Founder and Chief Executive of Therapy Smarts, said in July that half of her practice’s children could lose access under the out-of-state restriction.
Advocates have drawn a similar distinction. David Laxton, Communications Director at the Autism Society of North Carolina, told NC Newsline in June that he expected the legislation to improve the quality of ABA therapy, while cautioning that anti-fraud efforts should not create new barriers for families who rely on qualified providers.
Early authorization data shows where the documentation burden is landing. Sagar Jajoo, Co-Founder and Chief Operating Officer of Silna, a prior authorization vendor Acuity has profiled, told Acuity in September that 35 percent of the company’s North Carolina ABA requests from June through August were not fully approved on first submission, against 27 percent across its national book. Those figures describe Silna’s own clients rather than the market. Clinicians from Magellan and CentralReach said during an Acuity webinar in September that medical necessity denials usually start in the treatment plan, and North Carolina’s treatment plans now carry more required content than they did in June.
What to Watch as North Carolina’s ABA Oversight Takes Shape
Much of what the task force does will be visible only indirectly: in NCDHHS referrals, in actions by the Attorney General’s Medicaid Investigations Division, in which providers hold closed-network contracts next year, and in reverification and site visit outcomes. The General Assembly plans to meet monthly through the end of the year before its 2027 long session, when the next two-year budget is written.
Acuity requested comment from the North Carolina Association of Health Plans on any aggregate results the task force can disclose, and from NCDHHS on site visit and reverification activity among RB-BHT providers.
North Carolina is not the only state responding to rapid ABA spending growth with new structures. Florida’s ABA task force opened its Medicaid review with a $6.57 billion spending figure and holds its meetings in public. North Carolina’s version runs through private insurers whose deliberations are confidential by design, and through closed networks whose contracting decisions are not published.
